Core area “Sustainable economic development, training and employment” Promoting the local economy

Around three quarters of Cambodians live in rural areas. Poverty has been significantly reduced in recent years, but it is still disproportionately widespread in these areas.

Motorcycle on a road in Siem Reap, Cambodia

Motorcycle on a road in Siem Reap, Cambodia

Motorcycle on a road in Siem Reap, Cambodia

With Germany's support, over 2,800 kilometres of access roads have been repaired or newly built. These roads ensure that people living in rural areas have access to larger towns and cities, especially in the rainy season. Good road access is important so that people can get to health centres, schools and markets where they can sell their agricultural products.

In addition, German development cooperation in Cambodia focuses on enhancing business skills and improving the general environment for the private sector.

This helps boost value creation within the country, for example by enabling small and medium-sized enterprises to qualify to be suppliers for national and international producers. At the company level, the measures centre around promoting operational efficiency – in particular when it comes to the use of energy-efficient and climate-neutral technology – and improving productivity.

Particular support is being given to those who work in agricultural production including food production, to the tourism sector and to light industry. The expansion of digital skills within companies and industry associations is also being promoted as a cross-cutting issue. The development of training and vocational education measures that meet the needs of the labour market is also being addressed as part of collaborations with governmental and non-governmental vocational training providers.

The integration of Cambodian companies into regional and global markets is also being fostered through the relaying of due diligence requirements, the introduction of internationally binding quality standards and the provision of comprehensive information on global markets. For example, partners in Cambodia are receiving assistance for improving customs regulations, formulating trade facilitation agreements and working with the World Trade Organization (WTO).

Due diligence and standards

There is an increasing emphasis on international standards and sustainability requirements, which many companies must now consider due to the Act on Corporate Due Diligence in Supply Chains (External link) which came into force in Germany in January 2023. In response to this, companies along supply chains (including the textile supply chain, among others) are learning how to analyse, reduce and avoid negative impacts on people and the environment.

Labour, social and environmental standards in the textile industry in Cambodia are also being improved in order to increase the sustainability of supply chains. Among other things, the BMZ has contributed to the introduction in Cambodia of a minimum wage equal to 194 US dollars a month.

Another focus of Germany’s cooperation is on integrating Cambodia into trade within the Association of Southeast Asian Nations (ASEAN). Germany is promoting better border procedures, more efficient trade regulations and the inclusion of small and medium-sized enterprises in cross-border trade.

As at: 18/01/2024